- The USD/JPY drops even more to about 152.60, since the US dollar yields less than its peers in the middle of an optimistic environment in the markets.
- US Trump did not reveal its detailed plan for reciprocal tariffs on Thursday.
- The BOJ is expected to rise the interest rates.
The USD/JPY pair falls even more to about 152.60 in the European session on Friday. The asset weakens since the US dollar (USD) yields less in all areas in the middle of an optimistic environment in the markets.
American dollar today
The lower table shows the percentage of US dollar change (USD) compared to the main coins today. US dollar was the strongest currency against the Canadian dollar.
| USD | EUR | GBP | JPY | CAD | Aud | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.18% | -0.21% | -0.17% | -0.12% | -0.33% | -0.53% | -0.16% | |
| EUR | 0.18% | -0.03% | 0.02% | 0.06% | -0.15% | -0.35% | 0.00% | |
| GBP | 0.21% | 0.03% | 0.04% | 0.08% | -0.12% | -0.32% | 0.04% | |
| JPY | 0.17% | -0.02% | -0.04% | 0.02% | -0.19% | -0.39% | -0.03% | |
| CAD | 0.12% | -0.06% | -0.08% | -0.02% | -0.23% | -0.40% | -0.05% | |
| Aud | 0.33% | 0.15% | 0.12% | 0.19% | 0.23% | -0.20% | 0.16% | |
| NZD | 0.53% | 0.35% | 0.32% | 0.39% | 0.40% | 0.20% | 0.35% | |
| CHF | 0.16% | -0.01% | -0.04% | 0.03% | 0.05% | -0.16% | -0.35% |
The heat map shows the percentage changes of the main currencies. The base currency is selected from the left column, while the contribution currency is selected in the upper row. For example, if you choose the US dollar of the left column and move along the horizontal line to the Japanese yen, the percentage change shown in the box will represent the USD (base)/JPY (quotation).
Investors turn to risk assets since the president of the United States (USA), Donald Trump, did not reveal the concrete plan of reciprocal tariffs on Thursday and asked the bosses of the Treasury and Commerce to work in reciprocity. However, market participants anticipated that Trump would reveal a detailed plan of reciprocal tariffs immediately. This scenario has relieved the fears of an immediate global commercial war.
The American dollar index (DXY), which tracks the value of the dollar against six main currencies, reviews a minimum of almost four weeks around 106.80.
Despite the decrease in the attractiveness of a safe refuge of the US dollar in the current scenario, their prospects are still firm since investors expect the Federal Reserve (FED) to maintain interest rates at their current levels for longer. The president of the FED, Jerome Powell, said in his two -day testimony before the Congress that the Central Bank can maintain “the restriction of the policy for a longer time” if the economy remains strong and “inflation does not move towards the 2%. “
Meanwhile, the Japanese yen (JPY) also yields less than its peers, except the US dollar, although the operators have become increasingly confident that the Bank of Japan (Boj) will continue to harden the monetary policy.
The hard line bets of the BOJ have been driven by inflationary pressures that remain above the objective of 2% for a longer time and the firm expectations that wages will increase even more.
And in Japanese faqs
The Japanese Yen (JPY) is one of the most negotiated currencies in the world. Its value is determined in general by the march of the Japanese economy, but more specifically by the policy of the Bank of Japan, the differential between the yields of the Japanese and American bonds or the feeling of risk among the operators, among other factors.
One of the mandates of the Bank of Japan is the currency control, so its movements are key to the YEN. The BOJ has intervened directly in the currency markets sometimes, generally to lower the value of YEN, although it abstains often due to the political concerns of its main commercial partners. The current ultralaxy monetary policy of the BOJ, based on mass stimuli to the economy, has caused the depreciation of the Yen in front of its main monetary peers. This process has been more recently exacerbated due to a growing divergence of policies between the Bank of Japan and other main central banks, which have chosen to abruptly increase interest rates to fight against inflation levels of decades.
The position of the Bank of Japan to maintain an ultralaxa monetary policy has caused an increase in political divergence with other central banks, particularly with the US Federal Reserve. This favors the expansion of the differential between the American and Japanese bonds to 10 years, which favors the dollar against Yen.
The Japanese Yen is usually considered a safe shelter investment. This means that in times of tension in markets, investors are more likely to put their money in the Japanese currency due to their supposed reliability and stability. In turbulent times, the Yen is likely to be revalued in front of other currencies in which it is considered more risky to invest.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
